FINO Payments Bank Ltd (NSE: FINOPB) Q4 2025 Earnings Call dated Apr. 29, 2025
Corporate Participants:
Rishi Gupta — Managing Director and Chief Executive Officer
Ketan Merchant — Chief Financial Officer
Analysts:
Rajat Gupta — Analyst
Priyesh Jain — Analyst
Dev Shah — Analyst
Kushagra Goel — Analyst
Kunal Tirlotkar — Analyst
Dhruv Shah — Analyst
Harshit Jain — Analyst
Prateek Giri — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 and FY ’25 Earnings Conference Call of Fino Payment Bank Limited hosted by Go India Advisors. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touchstone phone.
I now hand the conference over to Mr Rajit Gupta from Go India Advisors. Thank you, and over to you, sir.
Rajat Gupta — Analyst
Yeah. Thank you, Steve. Good afternoon, everyone, and welcome to Fino Payments Bank’s earnings call to discuss the Q4 and FY ’25 results. We have on the call with us today Mr Rishi Gupta, Managing Director and Chief Executive Officer; Mr Ketan Merchant, Chief Financial Officer; and Mr Anup Agarwal, Head, Finance and Investor Relations.
We must remind you that the discussion on today’s call may include certain forward-looking statements and must be therefore viewed in conjunction with the risk that the company faces.
I now request Mr Rishi Gupta to take us through the company’s business outlook and financial highlights, subsequent to which we’ll open the floor for Q&A. Thank you, and over to you, sir.
Rishi Gupta — Managing Director and Chief Executive Officer
Thank you, Rajat. Good evening, everyone, and thank you for joining us for Fino Payments Bank 4th-quarter FY ’25 and full-year FY ’25 earnings call. It is always a pleasure to be with you all once again. And as we reflect on what has been the landmark year with our bank being in the forefront of digital evolution, leading to strong financial performance ever. FY ’25 was truly a transformational year for Fino. We have advanced our digital capabilities, deepened customer engagement and enhanced operational efficiency, strengthening our competitive position and delivering robust sustainable growth.
With an asset-light tech-driven platform focused on the mass-market segments, we are well-placed to drive long-term value-creation and financial Inclusion at-scale. Let me share some highlights — key highlights that defined the year. We delivered strong year-on-year revenue growth of 25%, aligned with our revised upward guidance underscoring the resilience of our business model. Our EBITDA rose by 22% to INR234 crores and PBT increased to 26% to INR108 crores, driven by operating leverage and disciplined cost management. Let me also share that we are the only payments bank, which is a tax-paying payments bank as such. And because of which our PAT numbers are not comparable with the PAT numbers of FY ’24. And being the only payments bank, which is tax-paying also means that we have cleared all our accumulated losses till-date. Our customer-base also reached to all-time high of INR1.43 crores with around 53 lakh digitally active users, demonstrating success in scaling inclusive digital access. Our average deposit grew 37% year-on-year with peak deposits crossing INR2,500 crores, reflecting growing customer trust and stickiness. CASA subscription renewal income also rose nearly 48%, further affirming our customer confidence. Our daily throughput or our daily average throughput has witnessed 10x growth over the past six years and has reached to more than INR1,250 crores per day. Overall throughput mix has changed from 99% physical to 51% physical or the non-digital business. This itself is testimony of evolution of our business model and response to changing ecosystem. So largely what we are saying, nearly 49% of our throughput is now coming from the digital platforms and 51% is coming from our physical platforms, the old physical platforms. Our digital throughput stands at INR2.25 lakh crore out-of-the total INR4.6 lakh crores with digital transaction contributing to 49%, a testament to deep integration of digital within our ecosystem. And you will be happy to know our UPI market-share has also increased substantially from 1.27% in-quarter four last year to 1.62% in-quarter four ’25, where we have seen a substantial growth in the overall UPI ecosystem as well. If I talk about the strategic progress and core focus, our core TAM strategy for — which means transaction accounts to monetization and this is consistent with us for the last three years, our core TAM strategy continues to drive long-term value anchored by strengthening of our liabilities franchise. By consistently growing CASA and broader deposit base, we are building a more stable, resilient and diversified financial model. Our strategy to convert offers to honors continues to deliver superior. If you remember in one of my old calls also, I have said that the revenue per customer on honors is substantially higher than the revenue per customer on offers. So this strategy of moving from offers to honors is actually bearing fruits, which is in-line with our time strategy. In FY ’25, we witnessed continuous growth in our annuity income, that is general income and increase in deposits, reflecting higher retention and potential cross-channel engagement. As I mentioned earlier, 48% growth in renewal income and 37% growth in the deposit income. Today, we manage over INR1.4 crore accounts with a steadily increasing base of active transacting customers. We added nearly 33 lakh customers in FY ’25, which I would say will be one of the top banks in the country in terms of the new customer acquisition as such. Our new CASA product offering like, corporate salary. For many, is a product where we are focusing more on how do we build balances. So our new CASA product offering — corporate salary for MSME reinforces our long-term ambition of building a scalable and a sustainable deposit engine in preparation for evolution into a full-service institution. Our distribution network remains the cornerstone of our business and a key enabler — enabler of financial. As of FY ’25, we have covered nearly 97% of India’s pin codes through a strong and growing merchant base of nearly 19 lakh merchants. During the year, we added 1.5 lakh new merchants, further strengthening our presence in the underserved and the remote regions across the country. We are also shifting focus from the — from mere merchant acquisition to improving activity ratios and deepening merchant engagement through multi-product offering driven monetization, retention and ecosystem. In-line with that, we are also now focusing a little bit more in terms of how do we improve our customer service and customer experiences. And we are building up a team and building a lot of digital platforms to support that. If I talk about digital innovation and the ecosystem expansion. Digital continues to remain a strategic pillar of growth. In FY ’25, digital contributed to 21% of the overall revenue and we expect this year to exceed to 25% and above in FY ’26. We are evolving from a digital service provider to a full-fledged ecosystem enabler, partnering with fintech to co-create innovation, innovative solutions across both B2C and the B2B verticals. If I talk about the D2C verticals, we have nearly 53 lakh customers actively transacting on the UPI platform and we are among the top-10 banks in terms of the effectiveness of our mobile application. Our application and systems are user-friendly and competitive as compared to other applications in the industry. In fact, a lot of effort and capital is going into building up the entire digital vertical and UPI platform. On the B2B side, overall ecosystem, as you would know and you would have seen in multiple media reports and otherwise experiencing it. The overall ecosystem in digital does pose lot of cyber fraud risk, resulting in issuing of multiple advisories by the regulators and LEA from time-to-time. Our approach to strike the right balance between growth and risk mitigation measures. We are scaling offerings through deepening our partner engagement in a very risk-calibrated approach to ensure sustainable growth. I think this is very important for everybody to understand. We will be launching soundbox and offline QR code to deepen our abilities on lending scale, on lending side and also PPI product in FY ’26 to strengthen our digital offering for our existing merchants, partners, which is in-line with our near-future strategy. While everything seems to be going well, our CMS business, we are seeing some headwinds in the past two quarters, given the stress in the entire MFI sector in specific and also witnessing a take rate issue because of the increased competition per se. We are exploring new industry use cases to regain the momentum in the CMS business and we are hopeful that we’ll be able to add some new industries in this year. Our transaction business is another area where we have seen a drop and we mentioned that last-time also. It continues to remain a hook product for our ownership business. Remnant business was impacted in-quarter three ’25, I think we mentioned that in the last meeting due to the change in regulations and overall at the industry level, the impact is envisaged to be around 40%. APS though has shown some signs of growth given the focus of the government on those cash withdrawal channel with the increase in the direct benefit transfer schemes running across center and the state. We anticipate subdued growth across these products without compromising on the footfalls for our CASA conversion. On this, I would like to say that when we look at the transaction business, there are two big things which is happening. One is that the customer behavior is changing from assisted or cash to more do-it-yourself digital platform. So that is one-shift which is happening. Second, in case of remittance, regulatory changes resulted in a big drop-in the industry. And the third is also because a lot of our customers who used to come to us for our office business is now becoming part of our honors. So that is all put — all three put together has resulted in transaction business. Partly it is good because we are now getting income in some other product rather than on the transaction business. Technology is something everybody knows is close to my heart. Technology transformation is key to the success of. To support and to support our scale and ambitions, we are in the advanced stages of overalling our technology infrastructure. Our next-generation core banking platform along with the the core architecture is scheduled to go-live in this quarter. This transformation will unlock significant scalability, speed and system resilience. We are also embedding artificial intelligence. There has been lot of talk around artificial intelligence in the last 1.5 years, specifically in the last one year. And your company is also actively looking at how artificial intelligence can help us to grow. Rather than running around doing many things, we looked at a couple of things where we are just focusing on the AI part. We are also embedding artificial intelligence in our tech stack, use cases under development to strengthen real-time risk management and operational efficiency. We will continue to invest in technology and this will ensure long-term efficiency, security and sustainable growth. So when I look at transition to small Small finance bank, the application is with the Reserve Bank of India, there has been a good exchange of information in the last quarter or so. Our understanding is that it is moving in the right direction. But end-of-the day, we will have to wait for the regulator to come back as such. But internally — personally, if I look at, we are building the railroads with specialized teams and enhancing organizational depth to ensure readiness. On the credit front, as you remember, I mentioned a brief last-time. On the credit front, we piloted products including gold merchant and housing loans to our NBFC partnerships. These early initiatives are providing valuable insights and laying foundation for our full-scale credit play post licensing. Happy to share we have grown from INR30 crore INR33 crore disbursements in-quarter four FY ’24 to INR200 crores disbursement in-quarter four FY ’25 on our own merchant network, which means more than six times growth in the last one year-on the referral business on the lending side. Our ongoing tech transformation will serve as a critical enabler of the transition, ensuring compliance, agility and scalability. Let me conclude now. In conclusion, we are entering the next phase of our journey with strong momentum across CASA, digital and technology pillars. Compliance first approach has always been Pheno’s first thoughts. Compliance-first approach is the cornerstone for our sustainable growth and will continue to remain despite impacting businesses as we will continue to explore new avenues of growth. We are committed to — committed to invest in technology, ensuring we are always in-line with the changing ecosystem. Casa and digital business will be the growth drivers for FY ’26. We remain confident in our strategic direction and fully committed to delivering sustainable long-term value for our stakeholders. With this, I’ll now hand over to our CFO, Ketan, to take us through the financial highlights in more detail thank you.
Ketan Merchant — Chief Financial Officer
Thank you, Rishi. Good evening, ladies and gentlemen, and thanks for joining us. FY ’25 marks a pivotal milestone for us as first Payments Bank to deliver five consecutive years of profitability. This consistent performance underscores the strength, scalability and resilience of our business model. Our strategic evaluation from transaction monetization to customer ownership and now digital scalability positions us to capitalize on India’s expanding financial service market. Just to recap, in-quarter one ’25, we had revised our guidance upward from 20% to 25% on the revenue growth.
For FY ’25, we are happy to share that we’ve achieved that with a revenue of INR1,847 crore. EBITDA grew at by 22% to INR234 crores and PBT increased by 26% to INR108 crores, both underscoring the strength of our strategic activity. We became a taxpaying entity from quarter two ’25 and despite that, our profit-after-tax increased by 7% to INR92.5 crores. This performance was driven by favorable shift in the revenue mix towards higher-margin annuity-led and digital segments, which are not only structurally more profitable, but also aligned with our long-term growth strategy. In Q4 FY ’25, revenue grew 23% Y-o-Y to INR493.5 crores with EBITDA up 18% at INR63.9 crores and PBT rising 18% to INR29.7 crores. For FY ’25, we closed the year with a cost-income ratio of 25.6%. This vis-a-vis the previous year was 26.5%. This reflects our continued operational discipline and the leverage from tech-led efficiencies which Rishi was alluding to.
Let me now walk you — walk you through segment-wise performance quickly. CASA. CASA remains our foundational pillar of all our annuity-led business model. In FY ’25, CASA revenue increased 43% to INR544 crores, including the float income and now contributes 30% of the full revenue. Renewal income grew by 48% Y-o-Y to INR190 crores, underscoring the effectiveness of our customer ownership strategy. Average deposits for FY ’25 rose 37% to INR1,849 crores and average customer balance improved to INR1,356, supporting higher treasury income through better float utilization. These metrics together tell a coercive story not only that we are acquiring, but we are also deepening our relationship and increasing monetization per account. Our total customers grew to 1.43 crores with over 33 lakhs new accounts added in FY ’25, including 8.6 lakhs accounts in Q4.
Nearly 40% of our total customers are digitally active and these customers show meaningful high renewal rates, validating our digital-first approach. Looking ahead, we continue to introduce specific segment offerings aligned with our evolving customer needs. Going on to digital, our digital business delivered exceptional performance in FY ’25 with revenue growing 4.2 times on a year-on-year basis with a total revenue of INR390 crores. This significantly surpassed our initial estimates and now contributes 21% of the total revenue in FY ’25. Digital throughput increased 70% and touched INR2.25 lakh crores and now accounts to 49% of the total throughput. This growth was driven by successful scale-up of our proprietary UPI switch, which we’ve discussed in the past and strong traction across the ecosystem partnerships. More than a growth lever, digital has emerged as a margin-accretive engine.
With its inherently low operating cost, digital segment has materially contributed to structural improvement in our profitability, i.e., at our PBT margins, which has more than doubled from 2.6% in FY ’21 to 5.9% in FY ’25. Platform activity also saw a significant uptick with total digitalization — digital transactions rising 80% from INR160 crores in FY ’24 to INR288 crores in FY ’25. This increase not only supports recurring renewal income, but also accelerate adoption across our platform-led ecosystem. Quickly going on to CMS, as Rishi said, despite macro headwinds impacting NBFC and MFI sectors, our CMS segment delivered a 25% Y-o-Y throughput growth, reaching at throughput, thereby reaching to INR83,451 crores in FY ’25 and contributes around 8% of total revenue.
We cannot miss competition, which we’ve been discussing for a while in CMS. Enhanced competition is leading to moderation of take rate, which was 0.18% in FY ’25 vis-a-vis 0.21% in FY ’24. MATM AEPS in FY ’25, we process MATM and AEPS transactions totaling to around INR39,705 crores, generating an INR185 crore in revenue. Notably, AEPS showed some signs of recovery in second-half with Q4 revenue growing 23% and throughput rising 10% Y-o-Y to INR8,127 crores. As highlighted in our previous earnings call, we remain confident in mid-term growth potential of our APS segment. Very quickly moving towards the small finance bank, as highlighted by Rishi, we are awaiting regulatory approval and we have started building the railroads for a loan referral business. Our SSP strategy remains same as payment bank plus model, i.e. asset-light models with limited branch network, liability first lending franchise and leveraging our existing distribution network with tight on technology.
As highlighted by Rushi again, with our current technology transformation for core banking system and system architecture, we anticipate incremental INR90 crore to INR100 crore capex cost on technology and operations for SSB. On the investment front, capital expenditure for FY ’25 stood at INR165 crores, significantly higher year-on-year. This was driven by strategic investment in-migration of our core banking system. So these investments are critical to scaling our capabilities and ensuring platform resilience as we prepare for next phase of growth. To conclude, FY ’25 reflects disciplined execution, strategic pivoting and solid foundation laid across all core businesses. As we transition to an SSB, we are confident in our ability to broaden our value proposition, expand our addressable market and build-on the momentum established this year. Looking ahead for FY ’26, our priorities remain clear, accelerate CASA and deposit growth, enhance digital infrastructure, deepen Finance fintech partnership while maintaining our cost-income ratio in the range of 25%. With this, I would now like to open the questions — open the floor for questions, please.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles the first question is from the line of Priyesh from HSBC. Please go-ahead.
Priyesh Jain
Thank you. So I have a couple of questions. And in light of the intensifying competition, I’d like to know like what are your key differentiators in terms of the technology, the service efficiency and even in terms of the UK infrastructure that we have that can help support the growth. I have a couple of more. Should I lay down now?
Rishi Gupta
Yes, you can. We’re just writing down and maybe we’ll answer it one-by-one.
Priyesh Jain
Okay. Okay. Then I have another question. And with respect to expanding the B2B UPI stack, what is your client acquisition strategy for that? And also like I’m saying that like now I think 30 — maybe over 35% of the customers are digitally active. So like what initiatives are we taking to increase this digital activation rate across the base. Yeah, these are my questions.
Rishi Gupta
Okay. Let me just have a go at it because these are very generic questions as. So first question is on the intensified competition and what is our differentiation. So you did not mention the product which you are talking about, but largely I understand is on the UPI side, is that correct?
Priyesh Jain
Yes.
Rishi Gupta
Okay. So on the UPI side, see, our customer segment which we are focusing on is the mass-market segment. People who earn INR3 INR4 lakh rupees per annum or so. So a lot of these people actually get their salaries or have incomes which come in cash. So our key differentiation is that we are a bank which is there in every corner of the country and so they can go to any of our outlet deposit cash into their bank account, which they open with Fino.
So they open a Fino bank account, they deposit cash into that Fino Bank account and then start using UPI because for UNB, it is our way of life. But for larger population of the country, it is a very aspirational product and everybody wants to scan their QR code and make the payment. So we are probably one of the very few banks which is opening accounts in the — in the remotest parts of the country closer to their home, opening it in a very seamless over within five to 10 minutes, you open an account and we give them a debit card and we give them a UPI handle also when they open an account, so they don’t need to go-around creating a UP handle. Automatically a UPI handle is created.
On-top of it, there are a lot of UPI offerings and other digital offerings, which we provide to our customers. And I think the biggest differentiation is our ability to suck in cash on-the-ground, which they can put in a bank account for them to enable a digital. So digital transaction can only happen if you have money in the bank. So if you go to any other bank, you will have to stand-in the queue, maybe deposit our money, it will take you some time, but in our case, it works out very efficiently. So these are the largely the conversations around the UPI ecosystem and that is where you would see large part of our customers are using our Bank account for transaction purposes.
Also the fact that a lot of people want to also keep a smaller amount in their bank account because of the cyber risk and frauds which are happening and don’t want a large-volume of because if you are doing UPI, 40, 50 transactions, 60 transactions in a month, then if you look at the bank statement, it will run into hundreds of pages in a year. So people have opened accounts where they keep a smaller amount and also doesn’t give lot of volume in their bank statement. So these are few, few reasons which are the differentiation as far as the UPI is concerned. Coming to your second question on the B2B UPI stack, I think our ability to provide a very seamless and a very efficient transaction with very, very low best of the class technical declines.
I think that is one reason from a B2B point-of-view, because when you’re doing B2B business, you don’t want technical declines to happen. A stable network and our ability to provide that 24×7 is one of our key differentiators. Also the fact that we have a very active client acquisition spread all across the country and we are handling lot of customers and merchants on account of that. We — our ability to provide very good technology solutions also because we have announced UPI switch compared to — compared to some of the other banks which are having third-party UPI switch. In fact, if you remember we mentioned that in this — in March ’23, we have nearly two years now completing that.
Our ability to provide them flexibility on the UPI switch, our ability to provide most of the new products on the UPI is because we created our own UPI switch. So these are couple of differentiations, I would say on the B2B UPI stack. I hope I answered your question, but we’ll be happy to sit separately if you want to go into more detailed answers.
Priyesh Jain
Yeah, sure. Thank you.
Operator
Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Dev Shah from please go-ahead.
Dev Shah
Hi, I have two questions. First is what are the key operational and regulatory challenges you foresee during the transition to a small finance bank and how are you preparing to address them? And second is with loan referral currently at INR30 crores to INR60 crores per month, how scalable is this model? And can it become a meaningful contributor to revenue in the coming years?
Rishi Gupta
Yeah. Good both of them are good questions. So let me just have — let me just answer the first on the SMB part, there are guidelines which are well outlined in the transition phase. So for any — any non-corporate payment bank after five years, they can apply for transition into SMB. On the basis of that, we have applied. The line-of-business, which we can’t do is a BC business, so we’ll have to look at how do we exit the BC business as such.
On operational side, I think the challenge in terms of building up the ecosy — the distribution network, if you want to set-up a very typical branch-led model can be one of the challenges. PSL, you need to have 75% deployment under PSL, but I don’t think that is a challenge because our — because we are in that catering to that particular segment of customers. Apart from that, if I look at liability is the key for any SFB and we have also seen a 37% growth in our liability business or the deposits in this year. So we continue to paddle that.
Our cost of funds is roughly around 2% or so, which gives us a good leeway to offer products at a very competitive pricing in the market, at least for the first few thousand crores as we build-up the liability franchise. So those are the few things. Apart from that, we are — now that we are on the question, what we are doing internally we have formed some small group right now within the small group, we have started to look at the kind of products which we are going to focus on, the geographies which we are going to get into the kind of POCs we plan.
We are also looking at what kind of organization structure and the kind of people we would require. On the technology, we have met already five, six vendors who provide various LOS and LMS technology platforms. So we are in the process of shortlisting that I think in the next 30 days or so, we’ll be able to shortlist at least the LOS and the LMS vendor. So a lot of work has started to happen in parallel as we await our SFB outcome from RBI. Secondly, coming to your second question on the loan referral, I think we have from INR2 — from INR30 crores in FY — quarter-four FY ’24 to INR200 crores in FY ’25, we have now reached INR200 crores.
Our next target is will be to reach INR300 crores, which means INR100 crores a month is something which we aspire to reach in this year, maybe in the first-half. And depending on the kind of products and the scale we see, it will — it will start — the moment it reaches INR100 crore-plus Per month, it will start to become a more meaningful conversation. But let me just also tell you that this is not only from a revenue point-of-view, this is also from the point-of-view of understanding our customers, understanding how to sell a lending product, what kind of challenges, what do you — what can you anticipate. So it’s both the learning part as well as like I said in the QR business also, the QR and the soundbox is not from putting up a P2M ecosystem. It is more from how I can do lending on those merchants at some point of time. So a lot of this conversation you would see is getting driven in that direction.
Dev Shah
Okay. Yeah, that’s helpful. Thank you.
Operator
Thank you. Participant who is to ask a question may press star and one. The next question is from the line of Goyal from CLSA. Please go-ahead.
Kushagra Goel
Yeah. Hi, sir. Thank you for taking my question. Am I audible?
Operator
Thank you. Yes, sir, you are.
Kushagra Goel
Yeah. Okay. So firstly, some data keeping question. So can you share…
Rishi Gupta
Sorry. Kushar, you allowed to be a bit more louder. I’m sorry.
Kushagra Goel
Yeah. Is this better? Hello.
Rishi Gupta
Yes, it is.
Kushagra Goel
Yeah. Sure. So some data keeping questions. Can you just tell us the CASA revenue for new subscribers in 4Q?
Rishi Gupta
Yeah, just give me a minute. I will just tell you that. This is your CASA NPB, right, the subscription revenue for quarter-four is around INR27 crores and for the full-year is around INR10, INR4.1 crores.
Kushagra Goel
Got it. And also for merchant CASA amount, can you tell that as of March ’25?
Rishi Gupta
Sorry, I didn’t understand this question. Merchant CASA amount means what
Kushagra Goel
The liabilities on your balance sheet. So there would have a merchant CASA lab in last year.
Rishi Gupta
Okay. Okay. Yeah, yeah. So you were referring to what we call as EMD or the — or the current account which is there. I think it is in the range of around INR250 crores INR260 crores.
Kushagra Goel
Okay. Got it. Okay. So okay. Second question is more regarding your guidance. So do you have any growth guidance and margin guidance for FY ’26?
Rishi Gupta
Let me start-off with the margin point first. We’ve last-time we had given a guidance, we’ve revised the guidance. Apparently, we are not coming up with the guidance, but I can tell you the momentum the way it is going through currently. On the margin side, we are currently in the range of around 31.5%, that is the gross margin which we are looking at. One point which is helping us is the digital. Whilst in my commentary, I had mentioned about that digital is growing and now contributes around 21%, whilst on the top-line basis or the gross margin, digital gives a relatively lower-margin as compared to the weighted-average margin of 31-odd percent.
But when it comes to bottom-line because of the low operating cost, digital almost constitutes a double-digit kind of a PBT margin on a standalone basis. So broadly on the margin front, we are expected to remain range-bound. Not strictly pertaining to margin, we have to be cognizant on one point which Vishi and I both said is on the CMS front, yes, we have seen a 3 basis-point reduction in the take rate between FY ’24 to ’25 that we anticipate in a bit more moderation also essentially happening in FY ’26. But remaining on the — okay, not a guidance which we are giving up, but the CASA and the digital momentum is essentially good and we intend to continue that momentum coming across for this year as well.
Two points to be cognizant is we have in our models also factored in the incremental technology cost, technology is indeed the cornerstone last — I just mentioned it of last year we had a capex cost of 165 coming in our models, we have factored the INR100 crore-plus of the capex cost coming for this year as well and on a VAU basis. So all of this taken together, digital CASA and the operating leverage will continue to drive our business momentum.
Kushagra Goel
Okay, sir.
Rishi Gupta
How rather the P&L momentum as well when I’m mentioning operating leverage.
Kushagra Goel
Sure. Just finally, one last question. So you talked about new CASA product. So just can you give more color on it? And also, so I noticed that your service account revenue had inched up Q-o-Q. So was that because of this new product and how it will go in the future, if you can give more color.
Rishi Gupta
So the is actually we got a feedback in the market that some people are not looking at a minimum balance or are ready to look at a minimum balanced product and rather than giving a fixed fees. So we devised this product where we were focusing on how do we build-up the liability franchise on account of that. So that is something which we are now focusing on. We started in the month I think, November, December last year and about 7,000 to 8,000 accounts we are opening per month-on account of that. So it’s a little early days, but the concept is to change the behavior of our customer to build more balances. This is in-line with our SFB conversation.
Kushagra Goel
Okay. That’s all. Thank you.
Rishi Gupta
Thank you.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. The next question is from the line of Kunal from Emkay Global. Please go-ahead.
Kunal Tirlotkar
Hi, sir. Happy evening. Sir, I see there has been some classification between treasury income and the CASA income, which has actually led the CASA contribution margin to rise from 50% to 53%. Can you please explain what has been the three — I think there has been some floating income which has been added in the CASA product. Can you please explain what is this change in the treatment? And after — I mean, if you remove the floating income from the CASA, what will be the total CASA income and the contribution margin for Q4?
Rishi Gupta
Yeah. Yeah, Kunal, fair observation if you go to the slide number 17, we’ve added the float income to this particular scenario. Our float income of here is earlier the entire treasury income, whether it was the treasury activities, which were allowed through reverse repo, etc, etc., was classified there at that point of time, it would contribute around 11% of the total revenue. Now we strip that off and added that to CASA, typically, which is in the range of around on a standalone basis would be in the range of around 23% 24%. So that’s how it looks like in terms of the breakup, if I look at it currently, which is around 30% for the year would be around 24% odd and stuff.
Kunal Tirlotkar
So adjusted for that, the CASA contribution margin would still be 50%.
Rishi Gupta
Yeah, CASA contributing margin, if you recollect would be in the range of 50%, you’re right. Sorry, I should have answered that.
Kunal Tirlotkar
Okay. Okay. And sir, in terms of overall guidance, you have given that — you have spoken about AEPS and BPS and all other products. I just wanted to understand what about remittances? Can we expect the declining trend to continue. And in terms of overall revenue also, can we expect it to be around 20% to 22% for the — for FY ’26?
Ketan Merchant
Yeah. Okay. We’ve not given a formal guidance, but I — in my previous question, I just mentioned it across as well that the momentum is good. I’ll come to a remittance piece in a bit. If you’ve seen our current base, which has now become at INR1,847 crores, we intend to continue our quarter-four numbers has been good as well. So digital and CASA will continue the momentum of growth. AEPS I just mentioned across remittance, Rishi also mentioned it to the reason that it’s still in the stage of evolution what will come through. So the growth aspect, I do not want to put a number, but the broad range which you’re seeing seems to be in the that direction.
Kunal Tirlotkar
Okay. Thank you, sir. And just one last question about DPS, the digital payment services. What can — what kind of throughput mix can we expect going-forward between B2B and D2C?
Rishi Gupta
Yeah. See on the B2C side, it is largely the UPI, P2P and the UBI P2M. So there is no revenue stream which is there on the D2C side except for the CASA engagement and the CASA activeness and the balances. The rest is all the revenue which Which you see is largely the B2B digital payments and the incentive which we get from MT every year.
Kunal Tirlotkar
Yeah. So going-forward, can we expect an 80-20 mix like 80% coming from the B2B throughput and 20% from SB2C throughput.
Rishi Gupta
That will have to — that question only finance minister can answer because if they allow MDR on UPI, then the mix can change. But right now, there is no MDR on UPI and you would have been needing some news like we also are doing. So if the UPI MDR comes in ’25, ’26, that will be good for the entire ecosystem because the target is now to reach 1 billion transactions a day-in the next two, three years.
Kunal Tirlotkar
Got it. Thank you so much, sir. All the best.
Rishi Gupta
Thank you.
Operator
Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Dhruv Shah from Ambica Fincap. Please go-ahead.
Dhruv Shah
Yeah. Hi, team. Congrats on a really strong set of numbers. Ketan, I just have one question.
Ketan Merchant
You need to be a bit more louder.
Dhruv Shah
Now
Ketan Merchant
This is slightly better.
Dhruv Shah
Yeah. I just have one question. Considering now digital has reached a base, is it fair enough to you track you on sequential basis rather than year-on-year basis?
Ketan Merchant
Okay. Sorry, come back to that. You’re saying that the digital has reached an base, which is 21% of revenue and 27% for quarter-four. So what is your question regarding that?
Dhruv Shah
Now we should track you on sequential basis at the year-on-year basis, right, because that’s your question.
Ketan Merchant
My answer to that one would be in a — the answer is yes that we typically in the year-one, you look at a multiple times growth. However, the growth driver will always remain. Digital will continue to remain the growth driver on that as well. So — and again, sometimes in year-one or year two of your transactions, you go in the next day-in terms of businesses. Now just to give a perspective, we approximately have some 23 partners. We intend to grow that partners. This is the digital payment system, which we are talking about to the extent of around 50% plus. So I would not agree with you on the moderation of this thing, but yes, can that be — will it be — will it be a multiple time growth? The answer is no. But it will be an accelerated growth and not a typical matured business growth, which typically comes from.
Dhruv Shah
No, Ketan, my question was more on the bank per se rather than digital per se, saying that now that we have a sustainable base because on also, we are comparing ourselves on year-on-year basis, but our BAs have become quite strong that we should now track you on sequential basis. That’s what my question was. Are you still think that our business is still seasonal that Q4 is seasonally strong, so you should that’s how I was coming through.
Ketan Merchant
No, that is fair enough. That is fair enough. If you’re saying the seasonality, yes, seasonality will come off because of the digital, even for that matter, CASA also has relatively less seasonality. If transaction banking in its peak time does have significant seasonality. So yes, there can be a Q1 or sequential quarter-by-quarter evaluation.
Rishi Gupta
Yes, see, let me just try to add to what Ketan is saying. See, we have some seasonality because in the quarter three, which is the — which is the festival — festival quarter, we see higher transaction volume, but a lower CASA addition. In-quarter four for whatever reason it could be more thrust, more government payments, clearing of budgets and everything. We see a higher-growth in deposits as well as on CASA. Our quarter one is relatively more muted for us in the last — except for the last year, we have seen a relatively more muted quarter one because of the fact that quarter-four, the exam quarter one may because of the government and other interventions don’t come in the quarter one and also the heat which is there, especially in the northern part of the country.
Quarter two is again some kind of a monsoon effect, which was largely true when it comes to the physical network of the — of the ecosystem. But on the digital side also, there would be some plus/minus here and there depending on the quarter as such. But the variation on quarter-on-quarter will definitely has — will come down and you have seen that coming down because of the digital piece which has come. So partly right, partly still, I would say it is still some way to go.
Dhruv Shah
Fair enough. And Kivan, just the next question is on effective tax-rate for this year, if you can just guide us through that.
Ketan Merchant
So in FY ’25, we had our tax coming in with effect from second-quarter, which is why effective tax-rate for last year was in the range of 17%. This year, it is a full tax-rate which we are looking at in the range of 25%.
Dhruv Shah
Okay, well, thank you so much.
Operator
Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Harshit from Institutional Equities. Please go-ahead.
Harshit Jain
So thanks for the opportunity. Have you observed any shift in CASA customer retention patterns in the recent years? Like historically, the retention rate was around 60%. So how do cohorts from FY ’23 compared to like FY ’25 in terms of engagement level? And are newer customers transacting more actively and increasingly using their bank account as their primary account? That’s one.
The other question is that you have invested more than INR150 crores in technology during FY ’25. So what specific efficiency improvement do you anticipate from this investment over the next two to three years? And what depreciation timeline is being applied to this capex? And how should we think about its impact on the near-term profitability.
Rishi Gupta
So I’ll answer the first two, Ketan can answer the third one. On the first part, which was on the renewal rate and the — and that — and the UPI. So you are bang on actually when we started a couple three, four years back, our renewal rates are less than 50% now we have reached more than or around 65% as such, so which is a very healthy rate, largely because of the UPI transaction flow and the activeness on the UPI. Our average balance also for active customers is in the region of INR1,900 to INR2,000 rupees. For UPI active customer, it is more than INR2,500 rupees. So from an overall point-of-view, we have seen a good shift coming in the activeness on this year in FY ’25 and that’s why we have shown a 48% growth on our renewal income per se.
Coming to your second question in terms of the new customer transacting. So on the — on the — on the second question in terms of the bank account, still I would not say that Fino is a primary bank account. Fino is more of a transaction bank account. And as I mentioned earlier, people who want to do small value transactions don’t want to give so much of money because of whatever reasons, don’t want to crowd their bank statements are largely people who are opening accounts with us. And we have seen that the activity level of customers who open a bank account who are transacting is far more than what it used to be earlier. Earlier our equip which was in the region of less than 50%, as I said now it has become more than 65% or so.
On the technology part, I’ll answer the first part. The second part, Ketan can answer the first part. For us, technology is not about efficiency alone. We are a technology-led bank. For us, technology comes first and banking is there because of the technology which we have enabled. We don’t have a branch model, so to say. So large part of our ecosystem runs on a very robust technology, which is — which does nearly INR1,400 crores — in fact, in March quarter, we touched more than INR1,450 crores of transactions per day. This would not be possible without a very robust technology platform. And you know with UPI on a particular day, we did more than INR1 crore UPI transactions also in March quarter. So that level of transaction volume of which our technology is able to handle is only because of investments which we have made in the last three, four years.
Just to give you a heads-up in terms of our first investments was done in the year FY ’16, ’17 when we started the bank. In 2022 onwards, we started to invest nearly INR80 crored crores per year. And this year because of lot of WIP as well, because of the migration, which is happening on our platform. That’s why the investment figure is about INR150 crore-plus. It’s only Because of the technology that we are ability to handle so many transactions is there and without any high latency and low technical declines, our ability to offer more products and ramp it up at that speed, I think technology to my mind is a very central theme in our everyday strategy or not strategy every day conversation as well as on the strategy conversation.
Ketan Merchant
Hi, Ketan, just to answer your specific point, we have around INR165 crores of our technology capex in FY ’25, approximately 50% of that goes into the upgradation of our core banking system. Rishi has alluded to the reasons for core banking systems. I think let me just add only one point of efficiency for us earlier in the conversation I did mention about digital is growing in multiple times over last year. Now digital as a gross margin is clogging around 21% 22% vis-a-visa about 30% plus. However, when it comes to the bottom-line, and I mentioned it earlier, if I just draw a parallel P&L of digital, the PBT comes to in the range of double-digit as opposed to 6%. That itself answers that how — and this is after factoring the depreciation, itself answers how that we are looking at in the technology as an enabler for our business.
On your last point, typically technology gets done over the five-year period and that is depreciated over a five-year period. And in all our business models, we’ve already factored that as well. And last one, I also mentioned it off that our technology investment will continue. Earlier in the — in our commentary, we had mentioned net off. So this year also we’re expecting amount which I had quoted earlier to continue on the technology investments.
Harshit Jain
Okay, noted, got it. Thank you so much.
Ketan Merchant
Thank you.
Operator
The next question is from the line of Pratik Ghiri from Research. Please go-ahead.
Prateek Giri
Hi, thank you for taking my questions. Rishi, I want to understand more about the degrowth in the remedience business. Is my immediate understanding it gives us a lot of visibility to among users. So in case you know this big growth continues, you foresee some damage happening to your CEO, CEO as a brand? My first question.
Rishi Gupta
So on the remittance de-growth, largely, I’ve said two, three things. One is the regulatory change which happened in November last year, where it became more difficult and had more friction if you do remittance through the bank-led model. So that led to the degrowth. The second is largely because lot of our customers who are our remittance customers have now started to use CASA as a product. So cannibalization of income under transaction is moved to CASA income. But because now that our merchant network has quite entrenched into the entire ecosystem as such on-the-ground.
So it’s — we don’t expect that the remittance regrowth will have an impact on our CASA numbers or reputation as such.
Prateek Giri
Because I have seen a lot of footfall at Pheno centers because of this requirement of transferring money from the urban centers to centers, which to a certain extent in my understanding converts to CASA as a service or product. So that is my question.
Ketan Merchant
No, no, see CASA, say remed customers are largely in the urban location. So — and now it’s largely 70% in rural. So even if with a drop-in remittance, we might lose some customers on the urban side, but not on the rural side because rural customers are anyway getting money in some form or are we are opening them even without a remittance product per se. So urban, there will be some challenges, but I don’t expect that to be a large challenge in the coming years.
Prateek Giri
Understood. And I’m sorry, probably you answered this earlier, but what is when do you see this de-growth continuing or RS form?
Ketan Merchant
I think the de-growth is happening as I meant because of the regulatory thing and the cannibalization of customers per se and also some other alternate channels which have come up for doing remittances, which we are also now planning to launch in this quarter. So I think quarter-four FY ’25, we have seen a good degrowth per se happening on. Our expectation is that we should see somewhere settling it down in the next quarter or so or maybe this quarter and then maybe there could be a U-turn depending on how the regulator looks at the new channels which have opened up for remittances.
Prateek Giri
Understood. Understood. Very helpful. Just one last question from my side. If I remember it right, probably we had given some guidance regarding our aspiration to be a 10% PBT margin business. So does that remain still there or is there any change to it?
Rishi Gupta
So those three things, you are absolutely right. The PBT margin then was basis of the TAM strategy and the monetization piece once we start the SFB process. So that was basis that. Secondly, also because of the cost which is going up on our entire IT spend, OpEx, the entire UPI transaction volumes have grown. So that is somewhere hurting us on the cost side. So I would say, let the SFB process run, I think then 10% is something which we would be able to achieve is what the guidance is.
Prateek Giri
Just one last question from my side what is the diluted number of shares we have at this point of?
Ketan Merchant
Sorry, number of shares at the bank level.
Prateek Giri
Yes,
Ketan Merchant
INR8.32 crores.
Prateek Giri
Okay. And because of this outstanding ESOP which is there outstanding which is no for that.
Rishi Gupta
They overshoot one-hour time and there are still some people waiting in the queue. Can we — can we take this question?
Prateek Giri
Yes, I’ll take it offline. I’ll you. Thank you.
Operator
Thank you. Ladies and gentlemen, due to time constraints, this was the last question for today’s conference call.
I would now like to hand the conference over to the management for closing comments.
Rishi Gupta
Thank you, Rajat, and thank you, everyone, for participating in the conference. Like I started with that good revenue growth of 25% — good 26% growth on the PBT level. We continue to focus on building our digital platform and building on the ownership through our CASA offering as such. We have also seen a healthy liability growth of 37% or such and 42% on the CASA revenue. We hope to maintain the momentum in FY ’25, ’26. As I mentioned earlier, there’s a lot of regulatory advisories and other things which are happening because of the high heightened new accounts as well as on the digital frauds, which are happening. So we are cognizant of that.
And our growth obviously will be calibrated with the directions which we get from the regulators and the LEAs. And hopefully in the next — and that is the target in this quarter, we should be moving from our FIAs to clinical that most of that integration, everything is now complete. We are just waiting for one or two more solutions and final piece of closure from FIS. Once that happens, by end of this quarter, we should be moving to our own systems, which will give us lot of flexibility and our ability to do more with the products in the years to come. I think that’s the broad guidance direction which we are looking at.
SMB part, we have already discussed as such, we are hopeful and hoping that in the next few months, we hear very — we hear a positive outcome from the regulator and you all pray to God that next time when we meet on the earnings call, we would have heard something from the regulator, but that is some timelines which have absolutely no control and visibility to. But we also pray and we’ll also pray that we get the answer from — a positive answer from the regulator in the next couple of months-to come.
And with this, thank you again and wish you a very happy earnings season.
Ketan Merchant
Thank you everyone.
Operator
Thank you. On behalf of Go India Advisors, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.